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  • Essay / Production Strategies for Sales Order Fulfillment

    Previously, in the literature, different production strategies for sales order fulfillment have been discussed. These strategies can be classified as Make-to-Stock (MTS), Make-to-Order (MTO), Assemble-to-Order (ATO), and Engineer to Order (ETO) [42, 43]. These strategies differ depending on where inventory is held in the system and where the production system is decoupled from the customer order [44]. The adoption of these strategies depends on the customer's willingness to wait, as Mather explains in his P/D report, where he compares the response time of the production system (P) to the customer's willingness to wait (D ) [45]. A company's decision to adopt one of these approaches is of great strategic importance [46] because it strongly affects the way a company conducts its manufacturing planning and control activities [47]. In an ATO environment, manufacturers typically maintain an inventory of standard manufactured parts and subassemblies that are assembled to an individual customer's order. Thus, ATO is an order-driven production strategy in which products are manufactured once the order is received and shipped immediately thereafter. Previously, it was also called delayed product differentiation, a shape carryover [48], implemented in assembly systems to defer differentiation of final product configurations. In a mixed product assembly, product differentiation points represent stages of specialization in the assembly system where each product begins to develop its own unique identity, thereby differentiating itself from other variants in the family [49]. In this way, a large number of custom products can be assembled from a small set of basic components. However, order-driven production responds to fluctuations in demand and thus ...... middle of paper ...... the joint efforts of product designers and production engineers. When properly performed, such redesign leads to a considerable simplification of the assembly process and a reduction in the total assembly time [55]. Likewise, the modularity of products was highlighted as an important factor facilitating the implementation of the postponement. Product modularity is a product system attribute that characterizes the ability to mix and match independent and interchangeable product building blocks with standardized interfaces in order to create product variants [56]. It separates the composition of finished products into parts and/or subsets that are common and those that are not [57]. Designing products around modular architectures results in a significant reduction in production times since long manufacturing lines can be broken down into parallel module production. [58].